Benefits TPA Cleared in New York Legal Battle

December 19, 2008 ( - A federal judge in New York has cleared a Buffalo benefits TPA of wrongdoing in a denial of benefits dispute involving a participant's son, ruling that the TPA is not a fiduciary.

U.S. MagistrateHugh B. Scott of the U.S. District Court for the Western District of New York, held that Meritain Health could not be held liable as a fiduciary under the Employee Retirement Income Security Act (ERISA) for the benefits determination for plaintiff Mark Wasmund’s son because its activities fell within Department of Labor (DoL) guidelines as “purely ministerial functions.”

Wasmund had argued that Meritain went beyond the DoL guidance because of instances where its nurse made medical determination decisions, its employees contacted participants directly, and because Meritain’s employees denied claims.

However Scott took issue with those assertions, noting that:

  • Meritain had no discretionary authority
  • the nurse had only been applying eligibility rules set by Wasmund’s plan, and
  • direct TPA-to-participant communications still fell within DoL guidelines for ministerial behavior.  

Noting that, under the plan, participants could ask the plan’s trustees to review denials of coverage, the court concluded that the participant’s objections regarding the benefit denial should have been made to the plan and not Meritain.

The case is Wasmund v. Meritain Health, Inc.,08CV498 (W.D.N.Y. 2008).